Quality Management Fundamentals

Quality

• Defintion: The total features and characteristics of a product or service that meet customer needs and wants at the time of purchase and during use.
• Two Aspects:
  • Design Quality: How closely a product or service's characteristics align with customer needs and wants.
  • Conformance Quality: How well a product or service performs relative to its design and specifications.

Costs of Quality (COQ)

• Four Categories:
  • Prevention Costs: Costs incurred to prevent defective products from being produced.
  • Appraisal Costs: Costs incurred to detect defective products.
  • Internal Failure Costs: Costs incurred on defective products before they are shipped to customers.
  • External Failure Costs: Costs incurred on defective products after they are shipped to customers.

Measuring Quality

• Control Charts are used to track and analyze changes in a process over time. They show the upper and lower limits of what is considered normal.
• Pareto Diagrams identify and prioritize the most common types of defects occurring in a process.
• Cause-and-Effect Diagrams (Fishbone Diagrams) are used to explore the potential causes of defects. They break down causes into categories like human factors, methods & design factors, machine-related factors, and materials & components factors.

Six Sigma Quality

• Aims to eliminate defects and reduce variability in processes by achieving near-zero defects.
• Uses methods like control charts, Pareto diagrams, and cause-and-effect diagrams to analyze and improve processes.

Nonfinancial Measures of Internal-Business-Process Quality

• Percentage of Defective Products Manufactured
• Percentage of Reworked Products
• Number of Different Types of Defects Analyzed
• Number of Design and Process Changes Made

The Learning-and-Growth Perspective For Quality

• Experience and Qualifications of Design Engineers
• Employee Training
• Employee Turnover Ratio
• Employee Empowerment
• Employee Satisfaction

Time As a Competitive Tool

• Two Operational Measures of Time:
  • Customer Response Time: How quickly companies respond to customer demands for their products and services.
  • On-Time Performance: How reliably companies meet their scheduled delivery dates.

Time Drivers

• Any factor that impacts the speed of an activity.
• Uncertainty About Customer Orders: Unpredictable customer demand can lead to delays.
• Bottlenecks: Occur when work exceeds the capacity to perform it.

Costs of Delays

• Delays can affect both revenues and costs.
• Revenues: Customers may be willing to pay more for faster delivery.
• Costs: Inventory carrying costs are a relevant cost.

The Balanced Scorecard and Time-Based Measures

• Financial Measures:
  • Revenue gains or price increases from fewer delays.
  • Carrying costs of inventories.
• Customer Measures:
  • Customer-response time.
  • On-time performance.
  • Customer satisfaction.
• Internal Process Measures
  • Number of bottlenecks in the manufacturing process
  • Percentage of products produced on time
  • Number of process changes made to improve speed
• Learning and Growth Measures:
  • Employee training in time-saving techniques
  • Investment in technology to improve process speed
  • Employee satisfaction with time-management processes.

Advantages of COQ Measures

• Financial Measures (COQ):

  • Focuses on how poor quality affects operating income.
  • Helps evaluate the cost and benefits of prevention and appraisal costs.
  • Assists in problem solving by comparing costs and benefits of different quality improvement programs.

• Nonfinancial Measures:

  • Easy to quantify and understand.
  • Direct attention to physical processes.
  • Provide immediate feedback on quality-improvement efforts.
  • Indicate future long-run performance.

Explore the essential concepts of quality management in this quiz, covering definition, aspects of design and conformance quality, and the costs associated with quality assurance. Test your understanding of prevention, appraisal, internal, and external failure costs. Ideal for students learning about quality management principles.